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Producer Can't Sue Over Germany TV Airing of Horror Films in New York

The defendants allegedly hatched a scheme to buy German-language DVDs to license them to German distributors.

Troma Entertainment, a B-movie producer and distributor, has run into a geographical roadblock in its attempt to hold accountable two individuals whom they allege are responsible for causing two of their films to be broadcast on German television without a license.

The company holds rights to horror spoofs Citizen Toxie: The Toxic Avenger IV and Poultrygeist: Night of the Chicken Dead, and in October 2009, it authorized an individual named Lance Robbins to represent it in negotiations with a German distributor. What the company didn't know what that Robbins was working with someone else named King Brett Lauter, and had already worked out a distribution license deal with a particular German outfit.

In a lawsuit that was filed in New York, Troma claimed that it only learned after Robbins' 30-day window lapsed that its movies were being shown on German TV. Robbins and Lauter were accused of purchasing German-language DVDs from Amazon and pocketing the licensing money. They were sued for copyright infringement, fraud and tortious interference in New York court.

But a judge dismissed the lawsuit, and on Friday, the 2nd Circuit Court of Appeals affirmed the ruling. The problem was that Troma couldn't show that the defendants had any connection to New York.

"The only issue before us is whether the district court erred in determining that it lacked personal jurisdiction over Robbins and Lauter under New York State's long-arm statute," writes appellate Judge Robert Sack.

The New York-based film company argued that the defendants' alleged infringement caused injury in New York because it resulted in "a loss of sale and a generalized harm" to its exclusive distribution over the two films. It further pointed to past cases where plaintiffs alleging copyright infringements over the Internet were allowed to proceed in New York because if not in the state, then where?

But the appeals court articulates a difference in this present dispute.

"Nowhere in Troma's complaint can one find an allegation suggesting that Robbins and Lauter's tortious conduct harmed Troma in a way that cannot be 'circumscribed' to a particular locality," writes Judge Sack. "This case is therefore more like 'traditional commercial tort cases' in which 'the place where [the plaintiff's] business is lost or threatened' exerts a significant gravitational influence on the jurisdictional analysis."

And so, Troma's attempt to do something about the appearance of Poultrygeist on German TV is knocked out without any judicial compass.

Referring to the place where the defendants should be sued, the judge says "whether that place is California -- where Robbins and Lauter allegedly hatched their scheme -- or Germany -- where they put it into effect -- we need not say. It is not New York."

UPDATE: Lauter sent us a statement that stated "Troma’s lawsuit was frivolous and never should have been filed. The Court’s decision to dismiss the case was a good one but I am still out thousands of dollars in legal costs.”